If There Are Two Large Firms,each with One-Quarter of the Market,and

question 1

Multiple Choice

If there are two large firms,each with one-quarter of the market,and 10 firms,each with one-twentieth of the market,in an industry,the Herfindahl-Hirschman index will be:

• A) 250.
• B) 1,350.
• C) 1,500.
• D) 1,600.
• E) 1,850.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing to purchase at various prices.

Marginal Cost Curve

A graphical representation that shows the change in the total cost of producing one more unit of a good.

Price Elasticity

The influence exerted by price variations on the demand level of a specific good quantified.

Price-Discriminate

The practice of charging different prices to different consumers for the same good or service, based on factors like location, buying habits, or willingness to pay.